Gananoque water rate jump due to “arithmetic error”

Gananoque residents will see a spike in their sewer and water bills this year because of an “arithmetic error” in how the town calculated last year’s bill.

Treasurer John Jeffery told town council that the error – four months is a third of a year, not a quarter – means homeowners were not charged enough in 2012.

“While reviewing the calculations used in setting the 2012 rates (fixed and metered) staff determined some significant errors in the allocation of total revenue and consumption to the revenue generated by the prior year’s rates. Consequently, the 2012 rates were set lower than they should have been,” he said in a report.

Jeffery recommended that the increase to make up the shortage be phased in over two years to soften the financial blow to residents.

“The increase in the fixed rate would be significant,” he said in recommending the phase-in period.

gananoque water sewer rate increaseFor an average homeowner using 477.5 cubic meters of water with a 5/8-inch water meter, it would mean a hike in their water bill of $33.60 this year. That comes on top of an increase of $58 in 2012. An average commercial costumer using 2,231 cubic meters of water with a one-inch meter would pay $95.52 more this year, on top of the $295 increase in 2012.

Council members kicked around the idea of subsidizing the increase with other funds but under the law, water and sewer systems must be self-financing. And some of the town’s water-pumping stations need upgrading to meet future growth, so the town will need money in the kitty.

In the end, councillors agreed to the water and sewer rate increases on the 2013 tax bill, phasing them in over the two years as recommended by Jeffery.

Council also tinkered with this year’s property tax ratios to tilt the balance slightly to give commercial taxpayers a break. About 81 per cent of the town’s property-tax revenue comes from residential property, 14 per cent from commercial and less than one per cent from industrial properties. Council has already set this year’s budget and a tax increase of 2.68 per cent.

By altering the tax ratio, commercial properties will pay $1.84 for every $1 paid by residential property owners. Last year, those commercial taxpayers paid $1.89 for every $1 paid by homeowners.